U.S. wheat futures rose on Wednesday as a series of external factors, along with freshly reported slowdown in winter wheat harvest and deteriorating spring conditions sparked strong buying interest and short covering, lifting prices from two-and-a-half-week lows. CBOT wheat (W_1) for September delivery settled +5% to $6.73 ½ per bushel.

The U.S. Department of Agriculture said on Monday that only 37% of the winter crop was harvested on Sunday, compared with 52% last year, and unexpectedly downgraded its spring wheat rating as rains failed to translate into improved conditions.

USDA graded 48% of U.S. wheat good to excellent, down 2 points from a week ago; 51% of corn good to excellent, up 1 point from previous week; soybean condition down 1 point to 50 %.

However, top commodities analysts say wheat's daily gains have been occurring due to geopolitical events again.

The grain export agreement, to which Russia, Turkey, Ukraine and the UN are parties, expires on 17 July. Signed by Ukraine and Russia separately on 22 July 2022, is on the verge of expiry. The agreements, also known as the Black Sea Grain Initiative, on the safe transport of grain and food from Ukrainian ports, have been extended several times in recent months. The most recent was on 17 May for two months.

The Black Sea Grain Initiative to support Russian and Ukrainian exports of agricultural and other commodities have helped reduce and stabilize food prices on the world market. To date, more than 35 million tonnes of grain and other food products have been exported under the grain initiative. Overall global cereal production for the 2021-2022 crop season was, according to the Food and Agriculture Organization (FAO), 2,813 million tonnes, with the 2022-2023 season expected to be 2,786 million tonnes. Therefore, non-extension of this important international deal will surely cause resumption of growth of grain prices – not only across Europe and North Africa, but also internationally.